ACC drops after weak Q2 outcome

ACC fell 2.17% to Rs 1,451.90 at 09:51 IST on BSE after consolidated net profit fell 45.1% to Rs 133.46 crore on 2.1% decline in total income to Rs 3037.12 crore in Q2 June 2015 over Q2 June 2014.

The result was announced after market hours on Friday, 17 July 2015.

Meanwhile, the S&P BSE Sensex was down 56.01 points or 0.2% at 28,407.30

On BSE, so far 26,526 shares were traded in the counter as against average daily volume of 23,674 shares in the past one quarter.

The stock hit high of Rs 1,453.75 and low of Rs 1,433.25 so far during the day. The stock had hit a 52-week low of Rs 1,337.90 on 7 January 2015. The stock had hit a record high of Rs 1,774.80 on 2 March 2015.

The large-cap company has equity capital of Rs 187.75 crore. Face value per share is Rs 10.

ACC's operating EBITDA (earnings before interest, taxation, depreciation and amortization) dropped 25.86% to Rs 335.16 crore in Q2 June 2015 over Q2 June 2014.

ACC's cement sales volume declined 2.36% to 6.20 million tonnes in Q2 June 2015 over Q2 June 2014.

During Q2 June 2015, the cement market was challenging and the company's sales volumes were subdued, ACC said. Overall construction activity remained dull with weak expenditure on infrastructure and housing sectors leading to lack-lustre demand for cement, the company said. Surplus capacity in the industry heightened competition and made cement prices volatile, it added.

With regard to update on ongoing projects, ACC said that the Jamul clinkering project is scheduled to be commissioned by the end of 2015 while the cement grinding units at Jamul and Sindri are expected to commence in Q1 2016, which is a delay of around one quarter. The company said that its ready mixed concrete business continued to register growth in terms of both volumes and profitability.

On future business outlook, ACC said it expects demand for cement to pick up gradually over the next couple of quarters, with the government's increasing focus on infrastructure development as well as on the promising new projects of Smart Cities and Housing For All. Interest rates are expected to soften further in the coming months, which may translate to increased participation by retail home buyers, ACC said. Meanwhile, the company will maintain its thrust on controlling costs and emphasis on market oriented initiatives, ACC said in a statement.

ACC is a manufacturer of cement and ready mixed concrete with a countrywide network of factories and sales offices.

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